Two New York Pharmacy Owners Charged In COVID-19-Related Fraud Case


We hope you all had a very Merry Christmas! The Allegiant Experts team would also like to take this opportunity to wish you a very Happy New Year as well. We must say that we truly mean those well wishes more than ever before. 2020 is a year that most of us can’t wait to see end. The COVID-19 crisis, combined with a slew of social injustices, has made this year a difficult one to bear.


With that said, we invite you to join us in feeling a renewed optimism about a brighter future. Although the changing of the calendar doesn’t automatically denote better days, we’re confident that the new year will offer us a sign of the positive things to come. Will there be an end to the pandemic in 2021? While most of us certainly hope so, it appears as if there are some individuals who are happy it took place.


Two owners of New York pharmacies found a way to profit off of COVID-19.


Thankfully, they have been charged for their health care fraud and money laundering schemes that stemmed from the crisis. As reported last week by the United States Department of Justice, 40 year-old, Peter Khaim and 37 year-old, Arkadiy Khaimov have each been charged with one count of conspiracy to commit health care fraud and wire fraud, and one count of conspiracy to commit money laundering.


In addition, Khaim was separately charged with two counts of concealment money laundering and one count of aggravated identity theft. Khaimov was also separately charged with two counts of concealment money laundering.


The duo’s scheme resulted in $30 million worth of fraud.


According to the DoJ report, the scheme involved using emergency codes and edits in the Medicare system that went into effect due to the COVID-19 pandemic. By exploiting the codes, Khaim and Khaimov were able to submit fraudulent claims for expensive cancer drugs. These drugs, however, were never provided, ordered or authorized by medical professionals.


The indictment alleges that by using COVID-19 emergency override billing codes, the defendants were paid over $30 million. Khaim and Khaimov submitted fraudulent claims to Medicare for the expensive cancer medication, Targretin Gel 1%. It was, however, never purchased by the pharmacies, prescribed by physicians or dispensed to any patients. As part of the scheme, the pair often used doctors’ names on prescriptions without their permission.


Khaim and Khaimov acquired control over dozens of New York pharmacies.


They paid others to pose as their owners and also hired pharmacists to pretend to be supervising pharmacists at the pharmacies. This was done to obtain pharmacy licenses and insurance plan credentialing.


As the DoJ report details, “as the effects of the COVID-19 pandemic began to be felt in the United States, the defendants used the COVID-19 pandemic as an opportunity to capitalize on a national emergency for their own financial gain by using the COVID-19 ‘emergency override’ billing codes to submit fraudulent claims for Targretin Gel 1%, which has an average wholesale price of approximately $34,000 for each 60 gram tube.”


Are you an attorney who is currently trying a health care fraud case?


Please don’t hesitate to contact Allegiant Experts to find out how our health care expertise may help your case. Give us a call at 407-217-5831 or email us at info@allegiantexperts.com. Happy New Year!

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